Buyers of Sequim homes have had their challenges since the collapse of the mortgage industry and the real estate market.  Even eminently qualified buyers of Sequim homes have had to jump unreasonable hurdles placed in their paths by evolving mortgage standards, including changing appraisal standards, and new processes in the underwriting industry.  All of this has not only hurt buyer’s, it has literally destroyed the ability of many sellers to get their Sequim homes sold.

Sequim Homes Face New Threat

A new threat has arrived on the scene that hinders both buyers and sellers.  No one is talking about this, and I believe this is the first time this issue has been exposed and articulated in writing.

Nearly everyone is aware of the higher standards that mortgage underwriters are requiring of buyers.  I don’t think any of us has a problem with the mortgage industry and their underwriters enforcing higher standards.  They should have been paying attention to the standards before their industry collapsed.  Who could argue with an underwriter who wants a buyer to be qualified and proof that the property will secure the debt?  No one.  This is not the problem.  The problem is irrational and unreasonable demands by underwriters and their industry’s evolving rules and procedures.

Underwriters Killing the Sale of Sequim Homes

This is a true story.  A buyer makes an offer on a Sequim home, and the seller accepts the offer.  We have mutual acceptance.  We have a closing date, and we have a few contingencies to clear up before the closing date.  All perfectly normal, right?  The standard inspections include a septic inspection, a home inspection, but not a well inspection because the home is on a community well system.  The septic needs a new septic tank.  The seller agrees to replace it.  The home inspection goes very well, and the home inspector notes a few items on his report, which is normal.  Every home inspection report will have some items enumerated as the job of the home inspector is to find any possible items that may or could need to be replaced.  Obvious code violations will be noted in the report.  All that is good.  The buyers want to know if there are any issues of potential concern.  That’s why they hire the home inspector and pay him $400.  (more…)

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Could there possibly be a shortage of Sequim homes for sale? How could there be a shortage in this recession when everyone knows there is a glut of homes for sale and a lot of foreclosures on the market? How could I even broach the subject suggesting that there may be a shortage of Sequim homes for sale? If you were retired and came to look at Sequim homes for sale, and you could not find a nice three bedroom, two bath, single level home on a nice (somewhat private) lot and at a reasonable fair market value, having searched for months before you got here and for a couple of weeks while you were here, you might begin to think that there is a shortage of homes for retirees. This is what is happening to some retirees. Let me unpack this whole subject in a way that seems to make sense in light of the apparent contradiction.

Shortage of Sequim Homes for Sale

My argument is based on several facts from my own clients’ experiences, on the extensive data I am able to pull from our Multiple Listing Service (MLS) by tracking listings and sales over the past several years, and from the emails, comments, and telephone conversations I have with many retirees going back to 2005 when the real estate market peaked and commenced its long decent.

The fact is in the Spring of 2012 many retirees are unable to find their ideal home from the inventory of Sequim homes for sale listed in the MLS. In an article I wrote about two years ago, I identified a developing pattern in the market. I noticed that the market was bifurcated. I described how retirees were coming to Sequim with a selected list of 6 to 12 homes to look at. This small list was filtered from their searches in our Sequim MLS and based on their parameters narrowed down from hundreds of homes. After months of looking at homes online, comparing features and viewing hundreds of photos of homes, and after numerous emails with me about the neighborhoods, the adjacent properties, the actual views from the house, they narrow the list to a selection of 6 to 12 homes. Here’s where it gets interesting.  (more…)

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How does one compare homes when you’ve narrowed it down to similar homes in similar neighborhoods in the same price range?  When you’re ready to make an offer on a home, there is clearly some important filtering that you will do to arrive at that place.  Here are two homes that are similar in appearance, similar on the MLS data sheet in square footage and a dozen other ways.  The neighborhoods are very similar, and they are priced the same within a couple of thousand dollars.  I showed both of these homes and sold one of them.  How did my client compare homes?

Compare Homes Structurally

Compare Homes Materially

It takes a trained eye to walk through a home and immediately recognize material defects and potential structural problems.  Some of my clients have that trained eye, and when they don’t I bring the eye.  It also helps to have a knowledge database in your head to know some general rules and practices to carefully compare homes.  For example, when my client and I looked at this roof, we recognized that this composition shingle roof needed a complete replacement.  Then we considered what we knew.  The house was about 18 years old, and the life of a composition shingle roof in the Northwest is about 20 years.  Yes, it would need to be replaced, and the cost of replacement for a roof of this size would be about $7,000.

Compare Homes Structurally

We also looked at the foundation.  The owner did something very unusual.  He covered the exposed portion of the concrete foundation with a cement paste.  My client understood this was suspicious and that there had to be a reason for doing this.  I also poured a lot of concrete in my youth.  Why would the owner do this?  Possibly to cover up cracks in the concrete foundation?  Whatever the reason, it did not bode well.

As we walked through this same home, we both observed the apparent shadows in the vaulted ceiling in the living room, indicating that primer was not used before the ceiling was painted.  But there were also signs of patching the sheetrock in a number of places.  There would have been a logical reason for so much patching.  But even the signs of this patching would not be recognized by the untrained eye.  Perhaps the building site had not been properly compacted, and that the house had settled causing cracks in the sheetrock.  The trim around the doors and at the base of the walls was cheap trim.  Apparently the carpenter wasn’t good with a miter saw, because the corners were sloppy.  The hardware used throughout the house was the cheapest hardware.  It’s a lot of work to carefully compare homes.

The home my client decided to buy was the one without any of these defects.  And get this–it was the same price.  I don’t know who will buy the other house, but I do hope they have a trained eye or that they have a buyer’s agent with a trained eye.  This is a vignette of how to compare homes.

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When is the best month to sell Sequim homes?  In what month do the most Sequim homes sell during the year?  Many homeowners have wondered when the best time to sell is, and some who had their homes listed with an agent have withdrawn their listings during the winter months, assuming that nothing was happening and that they might as well wait for April or May to re-list.  This hard data and chart below will help you plan your strategy to list and sell your home.  By the way, you know who would really benefit from reading this blog but who is not reading it because they don’t even know about it?  Sellers.  Sellers who have their homes listed but are frustrated because they haven’t sold their homes and they don’t understand the inner workings of the real estate business would discover so much in the 1,100+ articles here.  If I may, I would encourage you to email your friends the link to this blog.  It’s all absolutely free, and honestly, who gives away more real estate law, real estate sales and marketing data, and research tools than I do?  Help me give it all away.  Share this link with everyone you know.

Best Months to Sell Sequim Homes

Sequim Homes – Interpretation

To understand this graph on monthly sales of Sequim homes, I recommend enlarging it first by clicking on the image above.  What you’re looking at is monthly sales of Sequim homes (site built, $100,000 to $1 million) comparing 2005 to 2011.  So this graph actually gives us data to draw multiple conclusions.  The main point of this article is that we can see the sales of Sequim homes each month of the year.  Considering that this data represents actual closing dates, you’ll want to back up 30 to 45 days to identify the date the parties reached mutual acceptance.  Doing that tells us that in 2011 May, June, July, August, September, and October were the best selling months of the year.  This would confirm what most people believe, that the spring is when most buyers are making offers.  But most people might not realize that September and October are good selling months.  Of course, if you were one of the sellers in January through April, you would point out that Sequim homes sell in every month of the year, and you would be right.

Sequim Homes Sold 2005 vs. 2011

I included the data on monthly sales of Sequim homes in 2005 just for a comparison to the peak year of sales.  I found it interesting that in 2005 buyers didn’t seem to care about coming in the spring months.  They bought in large numbers in any month.  It’s also interesting, and a bit discouraging, that in some months in 2005, more than twice the number of  Sequim homes sold than in the corresponding month in 2011.

If you’re selling now or thinking of listing now, these next five to six months are crucial.  These will be the peak months for sales of Sequim homes this year.

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Sequim farms, Sequim homes, Sequim land, Sequim waterfront property, Sequim private mountain property, and the peaceful country environment on the Olympic Peninsula are all major reasons retirees are moving to Sequim and buying homes and land every single month, even in this recession.

Sequim Farms and Old Barns

If you grew up in the ’60s, you might remember your parents or their friends using an expression, “Why don’t you kids go play in the traffic.”  Then they would roar with laughter as they went back to their card game at the dining room table while enjoying the national past time, smoking cigarettes.  This basketball hoop on the side of this barn in the hills above Port Angeles reminded me of that silly humor from my childhood.  This basketball court would have given new meaning to that phrase.

Sequim Farms and Acreage

I was out previewing homes with acreage today for a client who lives down south.  It was a lot of fun, and we have some very interesting Sequim farms and homes with acreage for sale.  Some are old, and that’s okay as long as they aren’t priced like brand new homes you could build with your own perfect floor plan.  One of the homes I previewed today was on 10 acres and priced just under $500,000, but it was built in the 1970′s and would need substantial upgrades in the kitchen and bathroom, and there are some things you simply cannot upgrade.  Why some owners and their real estate agents don’t seem to comprehend that such a home is worth less than brand new construction, I do not know.  Buyers certainly know the difference, and buyers are not going to pay a premium price for an outdated architectural floor plan in a home that needs substantial upgrading that will costs tens of thousands of dollars.  Buyers tell me this all the time. 

Sequim Farms in the MLS

You can view all the Sequim farms and homes with acreage yourself right now online at Sequim MLS.

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How many Sequim homes are under contract now?  That reminds me of a couple of other popular sayings, like, “Are we there yet?” and “Can you hear me now?”  Are Sequim homes selling and how many are selling?  Buyers appreciate the buyer’s market, but sellers are losing sleep over whether the housing market is beginning it’s recovery.  Sellers cannot help but get a little impatient with their listing agents, because for too many sellers nothing seems to be happening.

Sequim Homes Under Contract

Sequim Homes Pending Interpretation

The homes represented in this chart are pending sales, also known as homes under contract, or in our MLS “Active-Under-Contract.”  There are 14 Sequim homes pending in the price range of $100,000 to $200,000, and there are 21 in Port Angeles.  This is the only price category in which P.A. beats Sequim.  More lower priced homes are selling in P.A. than in Sequim.

But above $200,000, clearly buyers prefer Sequim homes.  In fact, right now over 3.6 times as many homes have sold in Sequim compared to P.A. above $200,000.  And above $400,000 the four pending transactions are all Sequim.

Sequim Homes Preferred

Retirees prefer Sequim.  That is clear, and I’ve been writing about that trend for several years.  Retirees want Sequim homes.

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